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Personal Fin. vocab.

Work

Term

Definition

Aggressive Growth Stock Mutual Fund

Mutual fund that seeks to provide maximum long-term capital growth from stocks of primarily smaller companies or narrow market segments; dividend income is incidental; the most volatile fund; Also referred to as a small-cap fund.

Annuity

Contract sold by an insurance company, designed to provide payments to the holder at specified intervals, usually after retirement; the holder is taxed at the time of distribution or withdrawal, making this a tax-deferred arrangement

Aggressive Growth Stock Mutual Fund

Mutual fund that seeks to provide maximum long-term capital growth from stocks of primarily smaller companies or narrow market segments; dividend income is incidental; the most volatile fund; Also referred to as a small-cap fund.

Annuity

Contract sold by an insurance company, designed to provide payments to the holder at specified intervals, usually after retirement; the holder is taxed at the time of distribution or withdrawal, making this a tax-deferred arrangement.

Bond

A debt investment in which an investor loans money to an entity (corporate or governmental) that borrows the funds for a defined period of time at a fixed interest rate. Bonds are used by companies, municipalities, states and U.S. and foreign governments

C.D. (Certificate of Deposit)

A certificate of deposit (CD) that allows withdrawls to be made, without penalty, from the account. The major upside to this type of CD is that your money is accessible to you if you need it throughout the term. The downside is that the interest rate is g

Commodity

1. A basic good used in commerce that is interchangeable with other commodities of the same type. Commodities are most often used as inputs in the production of other goods or services. The quality of a given commodity may differ slightly, but it is essen

Diversification

A risk management technique that mixes a wide variety of investments within a portfolio. The rationale behind this technique contends that a portfolio of different kinds of investments will, on average, yield higher returns and pose a lower risk than any

Dividend

1. A distribution of a portion of a company's earnings, decided by the board of directors, to a class of its shareholders. The dividend is most often quoted in terms of the dollar amount each share receives (dividends per share). It can also be quoted in

Fixed Annuity

An insurance contract in which the insurance company makes fixed dollar payments to the annuitant for the term of the contract, usually until the annuitant dies. The insurance company guarantees both earnings and principal.

Futures

A financial contract obligating the buyer to purchase an asset (or the seller to sell an asset), such as a physical commodity or a financial instrument, at a predetermined future date and price. Futures contracts detail the quality and quantity of the und

Investment

An asset or item that is purchased with the hope that it will generate income or appreciate in the future. In an economic sense, an investment is the purchase of goods that are not consumed today but are used in the future to create wealth. In finance, an

Growth Stock Mutual Funds

A stock mutual fund that primarily holds stocks that are deemed to be undervalued in price and that are likely to pay dividends. Value funds are one of three main mutual fund types; the other two are growth and blend (a mix of value and growth stocks) fun

Large-Cap Fund

A mutual fund or ETF that has a dual strategy of capital appreciation (growth) and current income generation through dividends or interest payments. A growth and income fund may invest only in equities or in a combination of stocks, bonds, REITS and other

Liquidity

1. The degree to which an asset or security can be bought or sold in the market without affecting the asset's price. Liquidity is characterized by a high level of trading activity. Assets that can be easily bought or sold are known as liquid assets.
2.

Mid-Cap Fund

A type of stock fund that invests in mid-sized companies. A company's size is determined by its market capitalization, with mid-sized firms generally ranging from $2 billion to $10 billion in market cap.

Money Market

A segment of the financial market in which financial instruments with high liquidity and very short maturities are traded. The money market is used by participants as a means for borrowing and lending in the short term, from several days to just under a y

Risk

The chance that an investment's actual return will be different than expected. Risk includes the possibility of losing some or all of the original investment. Different versions of risk are usually measured by calculating the standard deviation of the his

International Stock

investments in enternational or over seas companys.

Risk/Return Ratio

relationship of substantial reward in comparison to the amount of risk taken

Savings Account

A deposit account held at a bank or other financial institution that provides principal security and a modest interest rate. Depending on the specific type of savings account, the account holder may not be able to write checks from the account (without in

Share

A unit of ownership interest in a corporation or financial asset. While owning shares in a business does not mean that the shareholder has direct control over the business's day-to-day operations, being a shareholder does entitle the possessor to an equal

Single Stocks

investment in one company

Small-Cap Fund

Refers to stocks with a relatively small market capitalization. The definition of small cap can vary among brokerages, but generally it is a company with a market capitalization of between $300 million and $2 billion.

Speculative

purchasing risky investments that presentthe possibility of large profits but also a higher than avrege chance of loss

Track Record

the past history of something; with investments, look at the five or ten year record

Variable Annuity

An insurance contract in which, at the end of the accumulation stage, the insurance company guarantees a minimum payment. The remaining income payments can vary depending on the performance of the managed portfolio.

Dow Jones Average

A composite index that measures changes within the 65 companies that make up three Dow Jones averages: the 30 stocks that form the Dow Jones Industrial Average (DJIA), the 20 stocks that make up the Dow Jones Transportation Average (DJTA) and the 15 stock

Standard and Poor 500

an avrege of the top 500 companys

New York Stock Exchange

A stock exchange based in New York City, which is considered the largest equities-based exchange in the world based on total market capitalization of its listed securities. Formerly run as a private organization, the NYSE became a public entity in 2005 fo

American Stock Exchange

The third-largest stock exchange by trading volume in the United States. In 2008 it was acquired by the NYSE Euronext and became the NYSE Amex Equities in 2009. The AMEX is located in New York City and handles about 10% of all securities traded in the U.S

Nasdaq

A global electronic marketplace for buying and selling securities, as well as the benchmark index for U.S. technology stocks. Nasdaq was created by the National Association of Securities Dealers (NASD) to enable investors to trade securities on a computer